Crucial Trial

The government's new oil and gas exploration policy will face its first test on the ground in the upcoming July auction.

- Ammar Zaidi

Buoyed by success of the first round, the government plans to offer more discovered oil and gas fields of State-owned Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) in the next auction during the new financial year. The government is also looking at giving incentives for enhanced and improved oil recovery schemes to help reverse a declining trend in output from ageing fields.

"We have just had a very successful round (of auction) of discovered small fields (DSF). We are preparing ourselves for DSF-II, and it will be launched very soon," notes Petroleum and Natural Gas Minister Dharmendra Pradhan. The minister has added that the DSF-II will comprise of idling discoveries of ONGC and OIL, and the auction will be held sometime in 2017-18.

Mr Pradhan has added that ONGC and OIL have to be accountable. They cannot hold on to those fields forever just because the government had given them the fields on a nomination basis. He has also warned executives of ONGC and OIL not to try and create any pressure through the media to retain the fields on which they have not done any work after discovery.

Flexible policy

In the first round of DSF, the government had offered for bidding 46 fields made up of 67 oil and gas discoveries "surrendered" by ONGC and OIL on finding them commercially unviable to develop under the price control regime. Of the 46 fields, 34 had received bids, and the government had approved award of 31 of them in February. The successful bidders were mostly the State-owned refiners Bharat Petroleum Corporation (BPCL), Hindustan Petroleum Corporation (HPCL) and Indian Oil Corporation (IOCL) as well as a company floated by directors of drug-maker Sun Pharmaceutical Industries.